Are refunds to customers deducted from Gross Sales Receipts for a Bevaris Alliance franchise?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
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- "Gross Sales Receipts" is the total gross sales revenues accrued or collected from the operations of Franchisee's Branded Business (as defined in the Franchise Agreement), whether for cash, check, credit card, pre-paid cards, pre order and paid meals through a designated software or on credit terms, from all sales of food, beverages, and other items and services (Food and Beverages) offered and sold by the Branded Business. The following shall be deducted from (or, as appropriate within its context, not included in) Gross Sales Receipts: (a) Any amounts, whether in cash, credit, or otherwise refunded to customers; (b) All amounts received in connection with the settlement of claims for damaged or unsalable Food and Beverages; (c) All amounts which are deemed to represent uncollectible accounts, bad debts or costs of collection; (d) The cost of meals provided to the employees of Franchisee at cost, if any, and the cost of charitable, promotional, and other complimentary meals given in the ordinary course of business and as is customary for similar operations.
Source: Item 6 — OTHER FEES (FDD pages 8–10)
What This Means (2024 FDD)
According to Bevaris Alliance's 2024 Franchise Disclosure Document, refunds to customers are deducted from Gross Sales Receipts. The FDD defines "Gross Sales Receipts" as the total gross sales revenues from the Branded Business, derived from all sales of food, beverages, and other items and services.
Specifically, the definition of Gross Sales Receipts explicitly states what can be deducted. These deductions include any amounts, whether in cash, credit, or otherwise, refunded to customers. This means that if a Bevaris Alliance franchisee provides a refund to a customer for any reason, the amount of that refund is subtracted from the total gross sales when calculating royalties or other fees based on revenue.
In addition to customer refunds, other items are also deducted from Gross Sales Receipts. These include amounts received from settling claims for damaged or unsalable food and beverages, amounts deemed uncollectible accounts or bad debts, and the cost of employee meals provided at cost, as well as charitable, promotional, and complimentary meals given in the ordinary course of business.